compliance cost

Rep. Keith Ellison, a Democrat member of the House from MN, explained why he thought creating more and more regulations was a good idea. You see, the more you pass, the more people businesses have to hire to comply with them, per Ellison:

"I think the answer is no," Ellison said when asked if he believes regulations kill jobs. "And here is why: When we talked about increasing fuel efficiency standards, the industry responded, and they need engineers and designers and manufacturers, and they need actually more people to help respond to the new requirement."

"I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine. I understand what you mean, because if anything adds a cost to a business, you could assume that that will diminish that business’s ability to hire. But I don’t think that’s actually right. I think what businesses want is customers and what — if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet," the Congressman said.

The economic ignorance in that statement is dumbfounding. The man obviously has no idea of what productive vs. non-productive work entails. Bureaucrats don’t “produce” anything but cost. They impose a cost burden that the producer must pass on or eat.

Most producers choose to pass on the cost burden in the price of what they produce (it obviously depends on the competitiveness of the market, profit margins, etc.). So in essence, every new regulation that imposes a compliance cost on a producer means those who consume the product end up paying the compliance cost in the price of the product at some point or another. And the man hours that could have been used in a productive job are wasted in seeking compliance with bureaucratic regulation.

These are the guys in Washington DC making decisions about your future. They’re deciding what portion of what you earn you should be allowed to keep. And they have no idea of what makes an economy run.

Here’s a representative that figures a job is a job. And he actually thinks he’s creating jobs what will benefit the economy by increasing regulation and bureaucracy.

Unfortunately his type are more prevalent that you might imagine. And our present situation is beyond their understanding. How does one go on a national television network and make statements like that and think they’re being profound when in fact what they say is profoundly ignorant? He obviously doesn’t know that. That’s just scary.

When all is said and done about our current situation, when the hindsight evaluations are made and the scope of the disaster is understood, it will be clear that people like Rep. Keith Ellison were as responsible as anyone for our economy’s inability to recover.